Question

Selected transactions for Indigo's Dog Care are as follows during the month of March.

A.March 1 Paid monthly rent of $1,390.
B.3 Performed services for $160 on account.
C.5 Performed services for cash of $85.
D.8 Purchased equipment for $695. The company paid cash of $95 and the balance was on account.
E.12 Received cash from customers billed on March 3.
F.14 Paid wages to employees of $610.
G.22 Paid utilities of $84
H.24 Borrowed $1,740 from Grafton State Bank by signing a note
I.27 Paid $260 to repair service for plumbing repairs.
J.28 Paid balance amount owed from equipment purchase on March 8.
K.30 Paid $2.090 for six months of insurance

Answer 1

1. Calculate Net Income for March: $160 (services on account) + $85 (cash services) - $610 (wages) - $84 (utilities) - $260 (plumbing repairs) - $2,090 (insurance) = -$2,799.

Step-by-step explanation:

Indigo's Dog Care experienced a net loss of $2,799 in March. This result is obtained by summing the revenues and subtracting the total expenses incurred during the month. Revenues include services performed for cash ($85) and on account ($160). The total expenses consist of wages paid to employees ($610), utilities ($84), plumbing repairs ($260), and insurance for six months ($2,090). The net loss indicates that the company's total expenses exceeded its revenues for the period.

The negative net income suggests that Indigo's Dog Care incurred more costs than it generated in revenue during March. This could be a temporary situation or indicative of broader financial challenges. The company should carefully review its expenses and revenue-generating activities to identify areas for improvement and financial stability.

It's crucial for businesses to regularly assess their financial performance to make informed decisions, adjust strategies, and ensure long-term sustainability. Indigo's Dog Care may need to explore opportunities to increase revenue, manage expenses more efficiently, or consider adjustments to its business operations to achieve a healthier financial position.